As the credit crunch continues, bank lending is tightening and it has become more and more difficult to obtain credit. If you are like millions of American’s you are probably wondering how to raise your credit score.
The truth is that if your credit is badly damaged, it may not be possible to raise your credit score quickly. Learning how to raise your credit score and implementing a long term approach is the best thing you can do.
Most of my posts talk about how to raise credit score quickly. Today I would like to give you my top ways to raise your credit score slowly.
Yes, I know that raising credit score slowly isn’t nearly as sexy as a quick fix. But, the fact is that there are many strategies that work but take time.
• Establish New Credit – When you open a new account, your credit score may take a temporary dip. It will recover, and unless you max out your new credit card, your score will eventually end up stronger. This is especially true if you currently have a very limited positive credit history.
• Rehabilitate Student Loans- Did you know that if you arrange to rehabilitate your student loans, you can have the negative history deleted in as little as 12 months? All you need to do is make 12 on-time payments.
• Pay for Delete- If you save up to pay an account in full in one lump sum, you can negotiate with the lender to completely delete the account and all of it’s negative history from your credit file. Because you are willing to pay off the full balance, many lenders are happy to do this for you. Just make sure you get the agreement in writing prior to making a payment!
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The first step to fixing bad credit is to get a copy of your credit report.
The first thing you will probably think to do is google the term “free credit report”. While this seems like a logical thing to do, be careful! Most of the sites that will come up are not free at all. They are sites that will give you a free report but then charge you monthly for “monitoring” of your credit.
Now, these services can be great if you are undertaking a credit report repair campaign, but you need to understand what you are getting. You don’t HAVE to pay to get your credit report!
Under the Federal Fair and Accurate Credit Transactions (FACTA) Act of 2003, Every American is entitled to a free credit report once a year. You can get your report from all three bureaus at once, or stagger your request throughout the year. (Staggering your requests makes sense if your credit is fairly good and you are simply looking for errors.)
The ONLY place to go to get this free report is AnnualCreditReport.com.
I got mine just this week and it is a fairly easy process that can be done online. They don’t even ask for a credit card. The only thing you have to watch out for is not exiting out of your browser as you finish one bureau and go to the next.
(Some of the bureaus will even let your dispute online from this system, though this is not always the preferred method because it doesn’t always provide you with the documentation you will need later.)
The only downside to the free annual credit report system, is that it doesn’t provide you with a credit score. If you are looking to repair your credit report, it may be difficult to track your progress unless you know what your score is.
To get your credit score, you will need to either pay for a one time report with a score or enroll in one of the bureaus credit monitoring services. Credit monitoring services will monitor your credit report and score on a monthly or quarterly basis, and alert you of any changes. Some of them also have modules that will allow you to play “what if “ games with your score and will make recommendations to improve your score.
If your credit is perfect and you don’t plan to apply for credit, you may have no need for such a service. However, if you would like to optimize your score in advance of applying for a major loan or are working on credit repair, these services may be useful.
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